Following the Central Bank of Brazil's deadline for virtual asset service providers (VASPs), only about 40 companies applied for operating licenses out of an expected 150 to 200 firms. The remaining businesses chose to exit the market.
Firms that successfully filed their applications are permitted to continue operating while the central bank reviews their submissions. Companies that did not apply are granted one month from the October 30 deadline to wind down their activities in an orderly manner. The central bank has up to two years to respond to submitted applications.
Tiago Severo, a crypto authority at the law firm Panucci, Severo e Nebias Advogados, noted that the low application count stems from high capital requirements and the strict reporting schedule established by the new framework. Requirements include sending client custody data daily, proof of reserves monthly, maintaining three years of audited balance sheets, and having an auditable anti-money laundering program. Severo explained that these rules proved unsustainable for many smaller platforms.
Larger entities, including Binance and Itaú, did submit applications. According to Severo, these larger firms may act as infrastructure and service providers for smaller companies, cooperatives, and retailers wishing to offer crypto services without running their own exchanges.
Beginning November 6, banks and payment providers are prohibited from facilitating transactions for unlicensed VASPs, cutting off their access to the legacy fiat system.
